Supreme Court Upholds Obamacare Individual Mandate As a Tax

by
Liz Goodwin ,
Yahoo News |
2012-06-28

In a victory for President Barack Obama, the Supreme Court upheld his signature health care law's individual insurance mandate in a 5-4 decision, upending speculation after hostile-seeming oral arguments in March that the justices would overturn the law. The mandate has been upheld as a tax, with Chief Justice John Roberts, a Bush appointee, joining the liberal wing of the court to save the law.

The court's four liberal justices agreed that the individual mandate should be upheld as part of Congress' power to regulate interstate commerce, but Roberts disagreed, and wrote that the mandate is actually a tax, despite the Obama administration's reluctance to describe it that way during the bill's passage. In its argument to the court, the government left open the possibility that the mandate is a tax, but did not rely much on that argument. Under the law, people who do not have health insurance will have to pay 1 percent of their income to the IRS starting in 2014. (There are exceptions for some religious beliefs and financial hardship.)

"If an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes," Roberts writes. He adds that this means "the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the government taxes, like buying gasoline or earning an income."

A footnote flagged by SCOTUSblog's Amy Howe explains the reasoning further. "Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing that they may not lawfully do is not buy health insurance and not pay the resulting tax."

Justice Anthony Kennedy, usually the court's swing vote, dissented, reading from the bench that he and three conservative justices believe "the entire Act before us is invalid in its entirety." In a 65-page dissent, he and Justices Antonin Scalia, Clarence Thomas and Samuel Alito dismissed Roberts' arguments, writing that there is a "mountain of evidence" that the mandate is not a tax. "To say that the individual mandate merely imposes a tax is not to interpret the statute but to rewrite it," they write.

Twenty six states sued over the law, arguing that the individual mandate, which requires people to buy health insurance or face a fine starting in 2014, was unconstitutional. Opponents cast the individual mandate as the government forcing Americans to enter a market and buy a product against their will, while the government countered that the law was only regulating a market that everyone is already in, since almost everyone will seek health care at some point in his or her life.

Before oral arguments in March, most Supreme Court experts and scholars believed the mandate would be upheld as an exercise of Congress' power to regulate interstate commerce. But after justices seemed deeply skeptical of the mandate in oral arguments in March, the consensus flipped, with most experts guessing the court would strike down the law.

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In a victory for President Barack Obama, the Supreme Court upheld his signature health care law's individual insurance mandate in a 5-4 decision, upending speculation after hostile-seeming oral arguments in March that the justices would overturn the law. The mandate has been upheld as a tax, with Chief Justice John Roberts, a Bush appointee, joining the liberal wing of the court to save the law.

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